Interview: Virginie Todesco, Fragomen

Virginie Todesco is Immigration Manager at Fragomen

What makes Luxembourg an attractive destination for businesses?

While Luxembourg’s reputation as a stable, business-friendly financial hub is well established, its real advantage lies in how seamlessly it supports talent mobility. Ranked the sixth most attractive country for highly skilled workers in 2023 by the OECD, Luxembourg offers a clear and predictable immigration system— a rare asset in today’s shifting regulatory landscape. For companies operating here, this means greater legal certainty and easier workforce planning, especially when compared to more complex EU jurisdictions. Combined with a multilingual, globally minded workforce, Luxembourg remains a strategic base for businesses seeking both agility and access at the heart of Europe.

In what ways does the government ensure it attracts businesses and highly skilled workers?

The Luxembourg government takes a coordinated, strategic approach to attracting both businesses and highly skilled workers. Recent tax reforms, effective from 1 January 2025, include enhancements to the favourable impatriate regime, which supports the recruitment of international talent by offering tax advantages to individuals—complementing the already attractive corporate tax environment.

To further support talent attraction and retention, Luxembourg established the High Committee for the Attraction, Retention and Development of Talent in mid-2024. This cross-ministerial initiative is focused on practical measures to ease the integration and long-term stay of international professionals.

In terms of everyday life, Luxembourg makes it easy for newcomers to settle in: public services are increasingly digital, and both education and healthcare systems are multilingual, with services commonly available in French, German, English and Luxembourgish. It also offers access to a vast selection of state-subsidised fee-paying schools. These features make it easier for expatriates and their families to navigate daily life and integrate into the local community—a key consideration for both employers and employees.

Finally, digital tools like the current “Work-in-Luxembourg” platform—soon to be replaced by a more comprehensive talent portal in 2025—are designed to streamline international hiring and onboarding, benefitting both corporations and individuals.

What are some of the key immigration pathways for highly skilled workers?

In Luxembourg, several immigration pathways are available to highly skilled workers depending on their individual circumstances.

The EU Blue Card is aimed at highly qualified foreign nationals who can demonstrate qualifications through academic certificates or years of relevant professional experience. The permit may be granted for four years initially, and after five years of lawful and uninterrupted stay, it is possible to apply for permanent residency and citizenship – accumulated stay in other EU countries under Blue Card status may count towards permanent residency requirements.

The Work Permit for Salaried Workers is most used for non-EU nationals hired directly by a Luxembourgish company. Applicants are required to hold a degree/qualification or relevant skills and experience to be eligible. Unlike the other pathways, a labour market test must be conducted unless the role is on the shortage occupation list. The permit can be granted for initially for one year and after five years of lawful and uninterrupted stay, it is possible to apply for permanent residency and citizenship.

Fast track option for the labour market testing: The fast-track process applies to 22 high-demand occupations. These include roles in sectors such as industrial mechanical maintenance, aircraft maintenance, bodywork repair, management consultancy and railway network traffic. For these positions, the ADEM certificate is immediately issued. This fast-track process aims to fill critical gaps in Luxembourg’s labour market quickly and efficiently.

The EU Intracompany Transferee (ICT) Permit is suitable for non-EU nationals who are employees of multinational corporations and need to be transferred to an EU branch. The applicants must hold a higher education degree, three months seniority with the business and, for managers and specialists, five years of relevant work experience. The permit can be issued for a maximum of three years for managers and specialists, and a maximum of one year for graduate trainees. Thereafter, the individual must change status or depart the EU for at least six months to be eligible to reapply. Crucially, residence accrued under this status does not lead to long term residency or citizenship.

The Residence Permit for Investors is available to potential investors or entrepreneurs can apply for a self-sponsored permit that allows for work rights. To apply, individuals must first obtain temporary work authorization through a standard employment permit. Following this, they can apply for a three-year Residence Permit for Investors, which requires an investment of at least EUR 500,000 in either an existing or newly established company in Luxembourg. For investments in new businesses, additional requirements apply, including prior approval of the business plan by the Ministry of the Economy.

Dependents of foreign national residents of Luxembourg may work without arranging a separate work permit. This right to work remains valid as long as the individual retains their family member status. Family members may accompany the principal in the pathways mentioned previously.

How do these pathways compare with other EU or Schengen countries?

Luxembourg offers a business-friendly immigration framework, with recent reforms aimed at streamlining procedures and reducing administrative burdens for applicants.

It ranks “Medium” in Fragomen’s Talent Mobility Index: Europe which captures the extent to which different countries restrict a company’s ability to transfer or hire a foreign national for temporary work. The lower the score, the more facilitating a country is, comparatively.

The main advantages of Luxembourg’s immigration framework as compared to countries are:

• Unlike most EU countries, there are no application fees for government processing. The only costs associated are for permit issuance (80 EUR).
• Employers in Luxembourg are not subject to any pre-arrival requirements, and unlike some other EU member states, they also have no pre- nor post- departure requirements reducing the administrative burden on companies hiring foreign nationals.
• Luxembourg’s rules for dependents are generous in comparison to other EU countries, providing unlimited access to the labour market based on dependent status. This means that, unlike the principal, dependents are not restricted by labour market testing, sector, profession or employer-specific requirements.
• Legal certainty and predictability, with a clear and consistent approach to immigration decisions that enables businesses to plan mobility strategies with confidence.
• A pragmatic stance on short-term work and business travel, allowing for more flexible mobility options aligned with real business needs.
• A generally positive and welcoming public sentiment toward migration, creating a supportive environment for international talent—a notable distinction from trends seen in other parts of Europe.

The following areas should be addressed to enhance Luxembourg’s attractiveness to businesses and foreign talent:

• Initial work permit applications cannot be made electronically, as only renewals can be made electronically in Luxembourg. In most EU countries, an entirely digital process is in place, or at least a portion of the process is electronic for initial applications.
  • 12 out of 27 EU countries have an online process for the initial application for most main work authorisations.
  • 7 out of 27 EU countries, have at least part of the main immigration process being submitted electronically (email or other).
  • 8 out of 27 EU countries’ processes are solely paper based, of which Luxembourg is one.
• Converting from business visitor to work-authorised in-country is typically not possible. Most EU countries allow for in-country change of status for visa-exempt nationals.
  • 2 out of 27 EU countries allow for business visitors to change to work authorised status in-country.
  • 15 out of 27 EU countries sometimes allow for business visitors to change to work authorised status in-country (e.g., for specific immigration routes only, limited to visa-exempt nationals)
  • 10 out of 27 EU countries do not allow for business visitors to change to work authorised status in-country.
• Luxembourg has comparatively long government processing times (2-4 months) for its main work authorisations (3-4 months).
  • 0.5-3 months: 17 of 27 EU countries
  • 3+ months in 10 of 27 EU countries.

What are the key immigration advantages for individuals moving to Luxembourg?

Luxembourg offers a streamlined and applicant-friendly immigration process, making it an attractive destination for international professionals and their families.

One of the standout features is the simplicity and autonomy of the process: applicants can apply for their own permits directly—without the need for employer or third-party sponsorship—using just an employment contract to initiate the procedure. There are no in-person interviews required, and medical checks are conducted locally, helping to speed up timelines.

For many, especially visa-exempt nationals, the process is even more efficient. A visa is required only for travel, not as part of the core immigration application. Once in Luxembourg, individuals can begin working immediately after a simple declaration of arrival at the local town hall and a medical exam—with no additional pre-work formalities required.

While the initial application process is still paper-based, Luxembourg has developed a robust digital infrastructure for managing post-arrival steps, renewals and ongoing immigration formalities via its Guichet.lu portal.

Finally, since 2024, it has become easier to qualify for long-term residence: time spent in other EU countries (under certain permit types) can now count toward the five-year residency requirement in Luxembourg, offering greater mobility and long-term planning flexibility for individuals building their careers across Europe. Luxembourg is one of 21 EU countries that allow dual citizenship without restrictions. Citizenship can be acquired through several pathways, including naturalization after five years of continuous residence. This route requires applicants to demonstrate integration into Luxembourgish society, which includes proving language proficiency and knowledge of the country’s culture, history and legal system.

 What are some trends or upcoming challenges HR professionals should be prepared for?

While Luxembourg continues to offer a stable, business-friendly environment and strong infrastructure for international talent, HR leaders should be mindful of several emerging challenges and compliance trends:

• Talent Attraction Amid Rising Living Costs
  The high cost of living—particularly housing—remains a significant hurdle in attracting and retaining international talent. Businesses may need to consider enhanced relocation packages or flexible work arrangements to stay competitive. Efforts are underway to address this issue: AmCham Luxembourg and its Real Estate Committee are currently collaborating with the Ministry of Housing on a project aimed at improving access to affordable housing—a key initiative to help attract and retain young, skilled professionals.
• Variable Immigration Processing Times
  Despite recent digitalisation efforts, most initial immigration applications still require paper filings, contributing to inconsistent processing times. This can delay onboarding and requires careful workforce planning.
• Increased Cross-Border Mobility
  With continued labour shortages locally, reliance on cross-border workers from France, Belgium and Germany is growing. HR must ensure ongoing compliance with immigration, tax, labour and social security regulations—including tracking work authorisations, managing hybrid/remote work and preparing for short-term assignments outside Luxembourg.
• Rising Compliance Risks
  Immigration-related audits are increasing, and fines have surged by 300% in 2024—primarily for illegal hiring practices. Regular internal audits, document tracking, and employee education (e.g., Schengen 90/180-day rule) are critical to mitigate legal and financial exposure. The upcoming ETIAS/EES systems will further impact mobility and require proactive preparation.
• Posting of Workers Requirements (PWN)
  Foreign employers temporarily assigning staff to Luxembourg must comply with declaration requirements to the labour inspectorate (ITM) and secure a social badge. HR is typically responsible for this process, regardless of the worker’s nationality or home office location.
  
• Evolving Workforce Models
  The rise of freelancers, gig workers and flexible contracts requires HR teams to rethink workforce structures and ensure proper classification, particularly in regulated sectors. (Fragomen publications on this topic are available upon request.)
• Green Skills Shortage
  As Luxembourg advances its climate goals, demand for “green skills”—particularly in energy, infrastructure and sustainability—is outpacing local supply. Strategic talent sourcing and training initiatives will be vital in addressing this gap.

The views and opinions expressed are those of the authors and do not necessarily reflect an official policy or position of AMCHAM.lu. Any content provided by our interviewees are of their opinion, and are presented in their own words.